Our objective is to develop a set of techniques for determining the contributions made by patient, physician and hospital to the cost and length of average hospital inpatient stay. These techniques will be designed to be readily applied to the development and evaluation of regulatory (and reimbursement procedures) operating within individual hospitals and across aggregations of hospitals. Three interrelated empirical analyses will be undertaken: (1) Two models relating the average daily charge and length of stay of inpatients at a large urban teaching hospital to the medical and nonmedical conditions of the patient, characteristics of the attending physician and the conditions in the hospital will be estimated using econometric techniques. Of particular interest here will be the effect that being a teaching patient has on the patient's length of stay and average charge. (2) Length of stay functions and charge functions will be estimated for all inpatients with a common diagnosis in at least 12 Western Pennsylvania hospitals. Of particular interest will be the determination of whether or not these functions are relatively constant across hospitals. (3) An operational regulatory procedure designed to control the length of stay of Medicaid patients, Pre-discharge Utilization Review (PDUR) will be evaluated using techniques developed in the two prior analyses.